The Jamaican financial institution believes that Bitcoin is not a currency for making transactions or payments. The country wants to privilege the use of its CBDC, as they see it as a more stable asset.
In several countries, the central banks and governments usually alert citizens about the alleged risks of investing in cryptocurrencies like Bitcoin (BTC). The Central Bank of Jamaica is among those making those warnings as part of a plan to discourage their use by launching its digital currency.
The governor of the Jamaican financial institution, Richard Byles, recently warned citizens about the unpredictable nature of cryptocurrencies. According to local media, Byles said they take the time to warn people that the value of those securities can go up and down.
Although the official clarified they do not ban their use, he said they do not consider it a currency for transactions or payments. On the contrary, he sees a central bank digital currency (CBDC) as a more helpful and risk-free asset.
He made that statement following the enactment of a law establishing the Jamaican digital currency as legal tender. Before that, the Bank of Jamaica (BOJ) had carried out the pilot tests between May and December 2021.
Regarding their CBDC, he stated that they support it without the help of any private investors. He considers it stable, arguing that the value of Jamaica Digital Exchange (Jam-Dex) will remain over time. He asserted that it would not go up and down in the market like (decentralized) cryptocurrencies.
Those warnings about Bitcoin and other cryptocurrencies come amid a sharp drop in that market in various regions. However, it is relevant to remember that this problem also affects the economy in general worldwide.
African Central Banks Also Pay Attention to Bitcoin
Markets in the red like the current one have raised alerts among governments worldwide. That has led the African continent to insist on preventing the use of Bitcoin and cryptocurrencies. They have discussed that subject within the Regional Consultative Group (RCG) of the Financial Stability Board (FSB) for Sub-Saharan Africa.
The Central Bank of West African States (BCEAO) and the Bank of Central African States (BEAC) form that organization. They talked about financial stability, regulatory and supervisory implications of crypto assets, and financial risks.
During the activity, they mentioned a study by the FSB to evaluate the supervision and regulation of stablecoins and (decentralized) cryptocurrencies. They also discussed the challenges those assets pose for regulators and policymakers regarding that industry.
They did not mention that the Central African Republic, a country part of that regional group, adopted Bitcoin as legal tender. However, recent events like that may be motivating those organizations to discuss the issue of cryptocurrencies.
Bitcoin is trading at around USD 21,404 and has accumulated a 2.9% gain over the last 24 hours. While its daily trading volume is above USD 27.41 billion, its market capitalization is about USD 409.36 billion, according to CoinGecko.
By Alexander Salazar